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A Manufacturing Story With a Happy Ending

Recently, our friends at APICS sent along a copy of their e-newsletter, Operations Management Now, edited by APICS CEO Abe Eshkenazi. In it, he retells a story first revealed to the public in a recent issue of Fast Company magazine here.

In the article, titled “Road to Resilience: How unscientific innovation saved Marlin Steel,” we learn of a Baltimore manufacturer that produced wire baskets solely for the bagel store industry. Marlin Steel had 18 employees, making around minimum wage, and was doing about $800,000 a year in sales of its $12 bagel baskets. When factories abroad started selling the baskets for $6, Marlin management knew it could no longer compete on price.

“Marlin saved itself by facing a truth that few threatened manufacturers can stomach: it was failing because it had gotten everything wrong,” writes Charles Fishman. “It had the wrong customers; it had the wrong products; it had the wrong prices. Greenblatt [owner of Marlin Steel since 1998] realized — just in time — that even wire baskets could be innovative.”

APICS’s Eshkenazi tells the rest of the story in his newsletter, and we’ll just reprise his words below:

In 2003, Greenblatt, who was handling sales, got a call from Boeing. The airplane manufacturer needed custom baskets to hold assembly parts. It needed the baskets to be precise, and it needed them fast. But, Boeing could pay Marlin Steel $24 a basket. That’s when things started to turn around for this small business.

According to Fast Company, the United States has 6 million fewer jobs today than it did in 1998. Yet, U.S. manufacturing is thriving, in large part, because of high worker productivity and efficient machines. “And the United States still has hundreds of thousands of factories,” Fishman writes. “The ones we notice are big… but most are small, like Marlin Steel.”

After the Boeing order, Greenblatt did some research. He discovered that factories of all varieties need wire baskets, and he also discovered that bagel stores are shutting down, not opening up. Marlin Steel had to change its strategies. Greenblatt has invested in staff education and smart machines. Now, company leaders work with customers to give them exactly what they want quickly. Instead of bagel baskets, Marlin Steel delivers engineering and design. In 2012, company sales were more than $5 million, marking the seventh consecutive year of sales increases.

If you’re an APICS member – and if you’re in the business of manufacturing anything, and you’re not, a member, you should be – you can review this and other APICS newsletter articles here.